NEWS MMR
U-turn on advice would need new consultation
NATALIE THOMAS
If the Financial Services Authority were to do a U-turn on its proposals for non-advised sales it would have to consult the indus try again, says the Association of Mortgage Intermed iaries. The regulator issued what was meant to be its last Mortgage Market Review consultation paper in December 2011, in which it called for non-advised sales to be banned. It wants to see mortgage sales
carried out on either an advised basis, or execution-only for high net worth and financial professionals. But lender trade bodies are fight -
ing for this proposal to be scrapped, as it would mean them having to train thousands of staff. AMI director Robert Sinclair says the fight is not over until the FSA brings out its final policy rules, which are expected in the summer. He says: “I am fairly confident
that if the FSA decides not to stick with its current proposals on advice it will need to consult the industry again. “A number of MMR proposals
are interlinked, so the regulator would need to go back and look at the whole thing again.” Sinclair says if lender trade bodies are not happy with how the
INTEREST RATES
No change on cards for rest of year as MPC holds base rate once more
Interest rates look increasingly likely to remain on hold for the rest of the year, following the Monetary Policy Committee’s decision to freeze them at 0.5% last week for the 37th consecutive month. It also voted to maintain the size
of its asset purchase programme. MPC members were split 7-2 on
whether to increase the quantitative easing programme last month, with two members wanting to boost it by £25bn to £350bn. Chris Parrish, group treasurer
at Yorkshire Building Society, says: “UK and worldwide economies remain relatively fragile and recent data from the Organisation for Economic Co-operation and Devel -
MORTGAGE STRATEGY April 9, 2012
op ment suggested the UK economy shrank by 0.1% in Q1, tipping us back into recession.” He says most economic commen -
tators concur that the base rate is unlikely to rise this year. But Barry Naisbitt, chief econo -
mist at Santander UK, says that although gross domestic product declined by 0.3% in Q4 2011, re- cent indicators of economic acti- vity have revealed more positive readings.
He adds: “Given last month’s
split vote on QE and recent speeches by MPC members, people will be interested in the minutes of this month’s meeting to see if anyone voted to extend QE.”
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FSA has defined advice it would be a good idea for them to come up with a definition. He says: “We are hoping to have discussions with the Council of Mortgage Lenders and the Building Societies Association to find some common ground between advised sales and execution-only.” The Financial Services Consu -
mer Panel came out in favour of non-advised sales in its feedback to the MMR last week. The FSCP is an independent
statu tory body set up to represent the interests of consumers in the development of policy for the regulation of financial services. Adam Phillips, chairman of the
FSCP, says the new rules have gone too far. He says: “The FSA is potentially confusing a request for information with advice and that makes shop - ping around and the buying process more difficult. “The requirements should be lim - ited to those customers who are credit-impaired, equity release, sale-and-rent-back, Right to Buy and potentially first-time buyers.” He adds: “These are the groups of people who may need advice but the majority of individuals will not.”
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